Monday, September 8, 2008

BIOFUEL POLICY : Who Benefits?

Suman Sahai

India certainly needs to rationalise its energy use and reduce its consumption of petroleum-based fuels. The answer lies not in compromising food security and joining the biofuel bandwagon, but in time tested strategies like increasing efficient public transport, and reducing private cars.

The Indian government has finalised a National Policy for Biofuels on September 11, 2008. The high profile given to this policy can be judged by the nature of the implementation committees that have been set up. There is a National Biofuel Coordination Committee chaired by the Prime Minister himself and a Biofuel Steering Committee under the chairmanship of the cabinet secretary. The earlier draft biofuel policy had proposed to start with a blending proportion of 5 per cent (5 per cent biofuel with 95 per cent petroleum) by 2012, 10 per cent by 2017 and over 10per cent after 2017. The final policy is far more ambitious, aiming for a blending ratio of 20 per cent by 2017. This means a huge jump in the amount of biofuels/ agrofuels that will be required in the next eight to nine years.Where will it come from? And considering our fuel consumption is increasing by over 7 per cent annually, does it mean the acreage under agro fuels will keep increasing too?

The Indian biofuel/agro fuel policy comes at a time when international agencies and experts have identified the main cause of the global food crisis to be the biofuel policies of the US as well as the EU. Warning signals about the consequences of the US led biofuel fad on food and feed availability are being sent out by the FAO. Reports prepared by the World Bank, the World Food Organization and the OECD predict that the current trend will take land out of food production and increase the price of agriculture commodities.

The report anticipates that this will lead to a rise in food prices over the next ten years. While higher food prices will be profitable for food exporting countries and large farmers, they will threaten the economies of food importing countries, the livelihoods of their farmers as well as the food available to the urban poor in these countries.

Realising the impact of the biofuel policy on global food supplies, the EU is contemplating a revision of its biofuel/agrofuel targets. Yet India, with all its food security concerns, is going full steam ahead with even bigger targets of agrofuels. And at the same time it continues its plans to import wheat! Does this make sense? Allow land to be used to grow agrofuels like biodiesel and become dependent on imported food grains to meet our food targets?

The vocal ‘biofuel lobby’, argues that bio-energy crops to produce agrofuels would only be grown on degraded or wasteland, not fertile land. This is pure mythology. There is no such thing as wasteland in India.

The village community uses all land for some purpose. Uncultivated land is used as grazing pastures on which the livestock depends for fodder. It is also the source of medicinal plants on which the rural community depends for its health and veterinary care needs.

The basic issue here is that of land, which is finite. We need to be very clear that land that can support food crops should not be diverted to producing biofuels. A piece of

land that would support a Jatropha plant, which is required to produce large amounts of oil, would have to have soil nutrients, would need fertilizers and sufficient amounts of water. Experts now concede that satisfactory plantations of Jatropha cannot be raised without at least three applications of water. So, if the so-called “wasteland” is capable of supporting Jatropha cultivation, it will support the cultivation of food crops, which should be the country’s primary goal.

There is an ethical dimension to the biofuel story as well, a question of equity. On the one hand are the poor whose right it is to have access to adequate food. The nation’s primary responsibility is to do its utmost to produce the maximum amount of food it can, to end endemic hunger and poverty. It is irresponsible and unethical to divert land that can produce food for the poor, to produce fuel for those who can afford to drive cars. So essentially, the agrofuel policy plans to sacrifice land that should produce food and fodder for the poor, and use it to grow biodiesel crops that will power the automobiles of the rich.

The global rush to switch from oil to energy derived from plants is being led by the rich countries who want to see energy plants grown extensively for fuel as a way to reduce their own climate changing emissions. The United Nations urges governments to beware the human and environmental consequences of the agrofuel trend, some of which could be irreversible. They warn that taking the current the agrofuel route will lead to deforestation, push small farmers off the land, and lead to serious food shortages and increased poverty. As the FAO estimates, biofuel production based on agricultural commodities increased more than threefold from 2000 to 2007. India should review its biofuel policy and examine our natural advantages to see what kinds of strategies are viable for producing supplementary energy.

India certainly needs to rationalise its energy use and reduce its consumption of petroleum-based fuels. The answer lies not in compromising food security and joining the biofuel bandwagon, but in time tested strategies like increasing efficient public transport, and reducing private cars. There is no harm in some petrol rationing till better discipline leads to reduced fuel use. This will give time for public transport and new technologies to be introduced. What has the government been doing so far on this front?

Why has the Department of Non Conventional Energy failed to make any breakthroughs in solar energy? Elsewhere in the world, experiments are ongoing on alternative fuels from algae, from human and animal wastes and from other carbon sources. What is India’s investment in such research? Is the only way to minimise petroleum import bills by snatching the food options of the poor, so that we can claim credits at the next international conference on climate change?


  • An indicative target of 20 per cent by 2017 for the blending of biofuels –bioethanol and bio-diesel has been proposed.

  • Bio-diesel production will be taken up from non-edible oil seeds in waste / degraded / marginal lands.

  • The focus would be on indigenous production of bio-diesel feedstock and import of Free Fatty Acid (FFA) based such as oil, palm, etc., would not be permitted.

  • Bio-diesel plantations on community / government / forest wastelands would be encouraged while plantation in fertile irrigated lands would not be encouraged.

  • Minimum Support Price (MSP) with the provision of periodic revision for bio-diesel oil seeds would be announced to provide fair price to the growers. The details about the MSP mechanism, enshrined in the National Biofuel Policy, would be worked out carefully subsequently and considered by the Biofuel Steering Committee.

  • Minimum Purchase Price (MPP) for the purchase of bio-ethanol by the Oil Marketing Companies (OMCs) would be based on the actual cost of production and import price of bio-ethanol. In case of biodiesel, the MPP should be linked to the prevailing retail diesel price.

  • The National Biofuel Policy envisages that biofuels, namely, biodiesel and bio-ethanol may be brought under the ambit of “Declared Goods” by the Government to ensure unrestricted movement of biofuels within and outside the States. It is also stated in the Policy that no taxes and duties should be levied on bio-diesel.


Biofuels have been widely publicised as a way to reduce greenhouse gas emissions. But researchers from University of Washington shows that some of the most popular current biofuel stocks might have exactly the opposite impacts than intended. The study highlights relative impacts of major biofuel sources like corn, grasses, fast-growing trees and oil crops on the environment in terms of water and fertilszer use and other criteria to calculate the environmental footprint of each crop. The study was published in the June issue of the journal Conservation Biology.

The study looked at factors such as the energy needed to produce a renewable fuel source

compared with how much energy is produced, the impact on soil fertility and effects on food supply when fuels based on crops such as corn and soybeans are mixed with fossil fuels. Based on those factors, the authors determined that cornbased ethanol is the worst alternatives.

The authors argue that because such large amounts of energy are required to grow corn and convert it to ethanol, the net energy gain of the resulting fuel is modest. On the other hand using a crop such as switchgrass, common forage for cattle, would require much less energy to produce the fuel, and using algae would require even less.

For example, farmers who plant only corn because it is suddenly profitable, and don't rotate with crops such as soybeans, are likely to greatly deplete their soil, which could limit crop growth and promote soil erosion. According to a study from the European Environment Agency, increased demand for fuel crops could have serious damaging impacts on wildlife, water and soils as more of Europe's agricultural land is handed over to biofuel production.

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